Turkey Economic Forecast

Turkey Economic Outlook

June 7, 2022

First-quarter economic growth lost some steam due to softer expansions in household consumption, amid red-hot inflation and deeply pessimistic sentiment. Economic growth is set to moderate further in the second quarter amid the fallout from the war in Ukraine, even-higher inflation and a weakened currency. Consumer sentiment deteriorated in April–May against the backdrop of greater price pressures, which are eroding wage growth and eating into consumers’ pockets. The manufacturing PMI moved further into contractionary territory in the same two months due to protracted supply chain issues and exchange-rate weakness. More positively, business confidence rose in the same period on robust expectations. Meanwhile, President Erdogan vetoed Sweden and Finland’s late March requests to join NATO and seems intent on further delaying or preventing their accessions into the alliance.

Turkey Economic Growth

The economy will expand at a notably softer pace this year, as domestic demand is dented by pessimistic consumer sentiment, a weak currency and elevated inflation. Unorthodox economic and monetary policy measures pose further downside risks to the lira and the economy. However, a tighter labor market should provide some support. FocusEconomics Consensus Forecast panelists project the economy to expand 2.9% in 2022, which is unchanged from last month, and 3.3% in 2023.

Turkey Economy Data

2015 2016 2017 2018 2019
Population (million)78.779.880.882.083.0
GDP per capita (USD)10,89810,80510,5569,3849,078
GDP (USD bn)858862853770754
Economic Growth (GDP, annual variation in %)
Domestic Demand (annual variation in %)
Consumption (annual variation in %)
Investment (annual variation in %)
Industrial Production (annual variation in %)
Unemployment Rate10.310.910.911.013.7
Fiscal Balance (% of GDP)-1.0-1.1-1.5-2.0-2.9
Public Debt (% of GDP)27.528.228.230.433.1
Money (annual variation in %)17.417.615.519.426.6
Inflation Rate (CPI, annual variation in %, eop)8.88.511.920.311.8
Inflation Rate (CPI, annual variation in %)7.77.811.116.315.2
Inflation (PPI, annual variation in %)-  -  -  -  -  
Policy Interest Rate (%)7.508.008.0024.0012.00
Stock Market (annual variation in %)-  -  -  -  -  
Exchange Rate (vs USD)2.923.533.795.295.95
Exchange Rate (vs USD, aop)2.733.023.654.845.68
Current Account (% of GDP)-3.2-3.1-4.8-2.71.2
Current Account Balance (USD bn)-27.3-26.9-40.6-20.88.7
Trade Balance (USD billion)-49.0-39.9-58.6-40.8-16.7
Exports (USD billion)155153169179182
Imports (USD billion)204193228220199
Exports (annual variation in %)-10.6-1.410.85.71.9
Imports (annual variation in %)-15.0-5.518.3-3.6-9.4
International Reserves (USD)92.992.184.272.978.6
External Debt (% of GDP)46.647.453.357.758.0

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Turkey Facts

Value Change Date
Bond Yield12.00-0.09 %Dec 31
Exchange Rate5.95-0.85 %Jan 01

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